Could Cheap Oil Derail Ag Tech?

Internet of Things technologies hold great promise for the agriculture industry, but they're not always an easy sell.
By Mary Catherine O'Connor

Mahan and his team at the UDSA have worked closely for more than a decade with Smartfield, an engineering firm based in Lubbock, Texas, to co-develop wireless sensor networks and imaging systems designed to collect and analyze temperatures, soil moisture, wind speed and a host of other variables. The goal has been to help growers better forecast and improve their yields while reducing irrigation and fertilizer use.

Mahan told me that working with Smartfield has led to improvements in the amount of data being collected in the test fields where his team uses the IoT equipment—they've gone from collecting 1 to 3 million measurements per season to now 30 to 40 billion, he said. And with that improved computing power has come far cheaper hardware. "When I started using them 30 years ago, infrared cameras cost thousands of dollars. Now, at $10 or so, they're practically disposable."

Yet, despite those remarkable gains (and billions of investment dollars being sown into agriculture technology), Olson said, growers are not fully embracing the types of remote monitoring and analysis products and services that firms such as Smartfield are offering. For the Lux Research report, she and her team conducted an affordability analysis and found that in many cases, "the technology costs more than… it can save a grower or increase their revenue."

That is likely to remain the case as long as oil prices are so low.

It's not all bad news, however. Olson's research did find that many growers are able to afford new technology through a software-as-a-service offering or a financing model that allows the grower to pay over time. A corn grower, for example, may find costs of $4 to $8 per acre per season palatable, she said. Her research shows that potato growers can stomach a far higher per-acre technology investment.

But there is also the risk that technology could create a sort of digital divide between large producers and smaller-scale growers, and that is a concern to Mahan. "One of my goals in development is to figure out a pathway to implementation in [a range of] production environments," he told me. "How can we downscale from the corporate farm to the independent producer [who] may not have a lot of resources?"

One pathway for farmers, big or small, could be to use carbon markets to raise funds to pay for IoT technologies. Last year, for example, California's Air Resources Board approved a protocol through which rice farmers can sell carbon credits to big emitters who must offset their emissions through the state's mandatory cap-and-trade program. To do this, they'd need to use an approved management practice in order to reduce the amount of methane generated by rice growing and cultivation. Growers need not be based in California to sell credits into its cap-and-trade market, either. Here's a case study on how a rice farmer in Arkansas approached the carbon market. As you'll see, it's not a way to get rich quick (what farmer ever expects that, anyway?), but it can have ancillary benefits beyond financial ones.

IoT technologies could be a win-win for both farmers and our precious natural resources, and today's low oil prices mark one of many hurdles to their wide deployment. What I learned from talking to an analyst and a technologist is that innovation in the business approach is as important as innovation in the technology.

Mary Catherine O'Connor is the editor of Internet of Things Journal and a former staff reporter for RFID Journal. She also writes about technology, as it relates to business and the environment, for a range of consumer magazines and newspapers.

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